Better Buy: Isis vs. Aegerion

Which drug -- and which stock -- is better?

Isis Pharmaceuticals(NASDAQ:IONS) and Aegerion Pharmaceuticals(NASDAQ:AEGR) have had a rough go of it lately. Aegerion is down about 50% from the beginning of the year, while Isis has fallen by a tamer 35%.

With their flagship drugs -- Kynamro for Isis (paired with Sanofi) and Juxtapid for Aegerion -- facing off in the treatment of orphan disease homozygous familial hypercholesterolemia (HoFH), the natural question is: which stock is a better buy?

For its part, Aegerion is reporting stronger (if still below analyst expectations) sales growth with Juxtapid -- to $27 million from $1.2 million year-over-year. The stock is also more cheaply valued, at 13 times trailing-12 month revenue, compared to Isis' 22 times revenue.

On the other hand, Isis boasts a far more expansive pipeline, including lots of drug partnerships with big pharmas like GlaxoSmithKline,Roche, and AstraZeneca. The benefit of that expansive pipeline was highlighted on Wednesday, when the company reported positive results for ISIS-GCGR in a mid-stage type 2 diabetes study. With a lot more drug candidates, the company has a lot more opportunities for success and greater diversification of risk -- something that may come in particularly helpful when Amgen (NASDAQ:AMGN) and other companies potentially come to market with their PCSK9 inhibitors.

So, which is the better buy? In the video below, Motley Fool health care analysts Michael Douglass and David Williamson give their take.